• MySTV

Row over cuts to councils as Scottish budget delivered

Derek Mackay says local authorities are getting £241m extra but Labour say they face £327m in cuts.

Spending plans: Derek Mackay set out his chosen measures.
Spending plans: Derek Mackay set out his chosen measures. PA

A row has broken out over council cuts following the announcement of the Scottish budget.

Derek Mackay used his first budget as finance secretary to announce £240m in additional funds for local authorities in Scotland.

But Scottish Labour claimed the small print of the proposals included cuts worth £327m.

Labour leader Kezia Dugdale said: "The SNP finance secretary has unveiled a budget today that will see the heart ripped out of public services. School results and teacher numbers are in decline. Our valued NHS workers are overstretched.

"However the finance secretary tries to spin it, today's budget means a real terms cut of £327m from the SNP government to local services.

"And they're making up the difference by holding councils to ransom - forcing them to use their tax powers, while they refuse to use theirs."

Mackay told the chamber his budget would inject £700m into the economy and the public sector and £300m would be ploughed into NHS coffers, equivalent to £120m more than inflation.

The cabinet secretary also confirmed he would not increase the basic rate of income tax in Scotland, even though ministers now have the power to do so.

He told MSPs at Holyrood: "In using the Scotland Act income tax powers for the very first time, we must have a balanced approach.

"Let me be clear, I will not pass the costs of UK austerity on to the household budgets of the lowest-income taxpayers."

He confirmed the threshold for the 40p rate of tax would only rise by the rate of inflation in Scotland - meaning the higher rate will be paid by those earning £43,430 north of the border compared to the £45,000 in the rest of the UK.

Mackay said it meant his budget would "not give a substantial real-terms tax cut to the top 10% of income earners".

He said he "sympathised" with calls for the 50p top rate of income tax to be reintroduced in Scotland for those earning £150,000 a year or more.

"I have had to balance that with the risk to our economy and am maintaining the current rate," Mr Mackay told MSPs.

He insisted this approach had been "endorsed by the electorate" and was the "right thing to do for our economy, jobs and public services".

https://stv.tv/news/politics/1375814-at-a-glance-key-points-of-the-scottish-government-budget/ | default

The Scottish Conservatives slammed the minister's approach, however, saying different tax burdens in Scotland and the rest of the UK would make it more difficult to do business in Scotland.

Shadow finance secretary Murdo Fraser said: "The finance secretary received an extra £140m from the Treasury compared to the current year, plus an extra £800m for capital spending. 

"He also has huge new powers over tax to deliver real growth in Scotland.

"However, Mr Mackay has chosen to hike taxes on families and businesses, risking a choking of economic recovery. That will only deprive Scottish public services of vital tax revenue.

"In not matching the UK increase in the threshold for the 40% rate of income tax, the finance secretary is making Scotland the most expensive part of the UK in which to live, work and do business."

The measures on income tax directly followed the proposals the SNP had already set out in the run-up to May's Holyrood election.

Mackay announced one change in tax, however, saying he had dropped plans to give the extra funds raised by increasing council tax charges for those in the largest homes directly to schools in a bid to boost education.

This approach was widely criticised by opposition parties at Holyrood and council leaders, who feared it would undermine local democracy.

Instead of the money coming from the revenues created by raising council-tax charges for properties in bands E to H, Mackay said the Scottish Government would give £120m to schools to be "spent at the discretion of teachers".

He said: "I will not sacrifice the educational chances of Scotland's poorest pupils. I will not abandon our radical plan to give schools direct control over significant new resources."

The SNP no longer enjoys a majority in the Scottish Parliament and will have to compromise with one or more opposition party if its budget is to pass.

Scottish Liberal Democrat leader Willie Rennie said: "The First Minister said today that there were acres of common ground between the parties but can I tell the finance secretary that he has got miles to travel before we can reach an agreement.

"Liberal Democrats will be pragmatic and reasonable in negotiations but it is the finance secretary who needs to be prepared to make drastic changes that will deliver the investment our education needs and subsequently the boost our economy requires."

Meanwhile Patrick Harvie, Scottish Greens co-convener and finance spokesman, said: "It's clear that there is much to be worked on in this budget if it is to be passed, and Green MSPs will scrutinise the details carefully over the coming days and weeks. 

"We will encourage the Scottish Government to raise its ambition ahead of next month's vote to set income tax rates and February's vote on the budget itself."

Download: The STV News app is Scotland's favourite and is available for iPhone from the App store and for Android from Google Play. Download it today and continue to enjoy STV News wherever you are.

One account. All of STV.

This field is required. That doesn't look like a valid e-mail format, please check. That e-mail's already in our system. Please try again.
Forgot password?
This field is required. This must be at least 6 characters long. Did you enter your details correctly?
If you've forgotten your details then use the 'Forgot password?' link.
Need to reset your password?

We'll send a link to reset your password to

We've sent you details on how to reset your password

Please check your email and follow the instructions.

Forgotten your email address?

Have you forgotten the email address that you previously joined with? Don't worry, by emailing enquiries@stv.tv we can help.

One account. All of STV.

This field is required. Please enter at least 2 characters
This field is required. Please enter at least 2 characters
This must be at least 6 characters long.
This field is required. This must be at least 6 characters long.
You must be over 16 to join STV.
This field is required. This doesn't appear to be a valid date
We need this to check that you live in an STV region.
This field is required. This doesn't appear to be a valid postcode
Would you like us to email you about our great shows and services from time to time?
We'll only send emails we think you'll like (see example) based on information you have supplied and shows you have watched on STV Player. For details on emails and advertising, see our STV & You page.
Would you like to receive emails from the Scottish Children's Lottery about draws, instant games and competitions?
We support the Scottish Children's Lottery (SCL), which is managed by our colleagues at STV ELM Ltd. You can find out more about the SCL on its website, including its Privacy Policy.

By continuing you agree to our Terms of Use, and understand our Privacy and Cookie Policies.

Upload Profile Picture

Please make sure your image is under 2mb in size and a valid JPG, PNG or GIF.

Are you sure?

Unfortunately, you'll be unable to access our premium content. We’ll be sorry to see you go, but if you change your mind you can rejoin us at any time.

Please verify your STV account

Please verify your STV account using the email we sent you. If you have lost the email, we can send you another one, just click the button below.


We've sent you a new verification email.
Please check your email and follow the instructions to verify your account.

Welcome to STV
Thanks for joining us.


Sorry, you must be at least 12 years old to place a vote for your Real Hero.

Please review our Voting Terms of Use for more information.


Sorry! It seems that you are using a browser that is incompatible with our voting service.

To register your vote please copy the below URL in to your regular mobile browser. We recommend Google Chrome, or Safari.



Sorry, you seem to have already voted in this category.

Thanks for voting

Now share your vote with friends on your social network

Share on twitter Share on facebook

Cast your vote

Please register or sign in to continue.

Cast your vote

This field is required. This doesn't appear to be a valid date

Cast your vote

Please fill out this form to cast your vote. As you are under 16 years old you will not create an STV account. Why do we need these details?

This field is required. Please enter at least 2 characters
This field is required. Please enter at least 2 characters
This field is required. That doesn't look like a valid e-mail format, please check.
Location This field is required.
Parental Consent This field is required.

That's you. All that's left is to click the 'Submit Vote' button below. By doing so, you confirm that you and your parent or guardian have read and accept our Voting Terms of Use, Privacy Policy and Cookie policy, and that the details you have entered are correct. We'll look after them as carefully as if they were our own.